KATHMANDU, May 4: Experts have advised the government to bring programs to improve private sector’s confidence by maintaining financial transparency, checking ballooning public debt and enhancing good governance practices through the upcoming budget for the fiscal year 2025/26.
Speaking at a pre-budget discussion organized by the Management Association of Nepal (MAN) on Saturday, stakeholders came up with the suggestions to the government for next year's budget which is scheduled to be announced on May 29. The government is currently in the process of drafting the budget amid the ongoing challenges of low credit flow, mass out-migration of youths, low capital expenditure and the country’s soaring public debt.
According to the MAN, the country has posted a ray of hope in recent days, with marginal progress in economic activities, improved balance of payments and increased foreign currency reserves. “However, the growth rate of banks’ credit to the country’s gross domestic product is not satisfactory, while the contribution of the increased public debt is not also reflected in the GDP,” said Mohan Raj Ojha, president of MAN.
Exercise caution in raising public debt
As per the government projection, Nepal’s GDP is expected to reach Rs 6.17 trillion with a growth rate of a mere 4.61 percent by mid-July this year. On the other hand, the country’s public debt jumped to Rs 2.676 trillion from 2.434 trillion in the first eight months of the current FY. During the review period, the debt to GDP ratio increased to 46.91 percent from 42.65 percent, while the per capita debt has increased to Rs 91,756 from Rs 83,000.
MAN suggested the government invest at least six percent of the country’s GDP in the development of infrastructure. The association has also advised the government to introduce budget related mobile apps, which could help maintain transparency in overall performance of the budget implementation and selection of projects.
Shova Gyawali, president of the Federation of Women Entrepreneurs’ Associations of Nepal, said the upcoming budget needs to come up with provisions to directly benefit women entrepreneurs. “The budget needs to promote skills for women along with facilitating market access for the goods produced by women,” said Gyawali.
Ambika Prasad Paudel, chairperson of the Tax and Revenue Committee of the Federation of Nepalese Chambers of Commerce and Industry, sought the government’s initiative to solve problems underlying the Revenue Tribunal and existing tax structure.
Facilitating Non-Resident Nepalis to invest in the country’s stock exchange market, providing tax holidays to the newly established businesses, implementing stable policies in automobile businesses, increasing financial and skill improvement supports to small and medium enterprises and promoting information technology related businesses are among the concerns raised by the participants of the program.
